For any legal matter, regardless of value, you must have a cost agreement with your client. Even though the case is probably less than $750 and you don`t have to provide a full statement of cost opening, you still need to have a cost agreement. An NSW lawyer was partially successful in a defamation action. For keeping a registered law firm to which he was related and, for part of the time, the director and administrator of the case, the court was prepared to order the defendant to pay his costs on the basis of compensation. During the period during which the solicitor was essentially represented himself, with the exception of the fictitious company law, his costs were assessed on a correct basis. Regarding McCallum J to McMahon v John Fairfax Publications Pty Ltd (#8)  NSWSC 673 stated that there are strict rules on how you should treat cost agreements. If you do not comply with these rules, the agreement may be cancelled, even if your customer has accepted it. Under section 178 of the Act, the most serious consequence of a violation of the disclosure provisions of the Single Act is that any cost agreement is inconclusive. In addition, the client is not obliged to bear the legal costs until they have been verified by the Tribunal or the Legal Services Commissioner (and the practitioner cannot maintain the procedure for recovering the costs charged until such verification has taken place). The practitioner normally has to bear the costs of the verification and non-deployment may also result in a reduction in eligible costs by an amount proportional to failure. Finally, a major compliance error may constitute unsatisfactory professional behaviour or misconduct. What the court said is: Read on “Too wide a range of estimates of the total cost nSW solicitor causes great grief” There are additional disclosure obligations for contingency cost agreements and those that include uplift fees.
It is essential that these disclosures be made in the agreement itself rather than in a separate disclosure statement. If you think your customer has a good chance of success, you can also include a condition to pay an “uplift tax.” This is an additional payment for a successful result that must not exceed 25% of the legal costs (excluding disbursements). Your cost agreement should be clear about how the tax is calculated, what you expect from the tax, and what factors can change the final calculation of the fee….